Where's the dislike button?
To be fair, there are a lot of other properties of fluid dynamics that this engine can't handle. Hydrogen bonding, water flow through pipes, larger bodies of water such as ponds, rivers, lakes, oceans, and additional physical properties at various temperatures...
The list goes on, but none of that is programmed into this demonstration. It's a very complex way of moving individual pixels around surfaces. Completely realistic? No. I can agree with that. But completely UNrealistic? No to that too. It is a dramatic step forward compared to water physics of the past. For how beautiful games have gotten, they still rely on tricks and tomfoolery to make you think it's water.
But we've grown wise to the tricks, and we have all been looking forward to an update on physics engines for just this sort of thing. There is a ton of work still to be done, and as VitalyT said, this kind of an advanced physics engine will wreak havoc on a graphics card. New drivers, graphics engines that incorporate these dynamics, directX solutions to work with the physics, and completely revolutionary graphics card hardware to perform break-neck speed calculations for it all... all of it needs a good amount of development before it becomes a realistic addition to game engines.
